Video: Guns, fiscal policy and Obama’s second term

MR. DAVID GREGORY: And, good Sunday morning. This is Inauguration Day for President Obama, the public ceremony is tomorrow. But according to the Constitution, his second term officially begins today. Moments ago, the vice president was officially sworn-in. And at noon today, the president will take his official oath of office during a small private ceremony in the Blue Room of the White House. So the stage is set as well at the U.S. Capitol for the inaugural address and public swearing-in tomorrow. The president kicked off the weekend festivities yesterday with a day of service, and the first lady hosted a special concert for children of military families last night.

MICHELLE OBAMA (The Kids Inaugural: Our Children, Our Future/Last Night): This is what inauguration is all about. It’s about celebrating who we are as Americans and all the things that make this country so great. And when I think about who we are, when I think about what makes America great, I think about all of you.

(End videotape)

GREGORY: On Tuesday, it’s back to work for Congress, and there are two big issues that are going to dominate the beginning of the president’s second term, guns and the nation’s debt. Joining me now to debate those issues, Democratic Senator Chuck Schumer of New York and newly elected Republican Senator Ted Cruz of Texas. Welcome back as Senator Cruz to MEET THE PRESS. Welcome to both of you. I want to start on this gun debate because as I say, even before the second term is officially underway, this debate is well underway. Here are the highlights of what the president wants to accomplish with comprehensive gun control. Universal background checks. He’d like to pursue a ban on high-capacity magazines. An Assault Weapons Ban that, of course, lapsed in 2004. And he’d like stricter laws on gun trafficking. But Senator Schumer, just as I challenged Wayne LaPierre of the NRA on this program, very hard, when-- when this initially came up, I challenge you as well with a question of, is this really going to make a difference? And Rich Lowry wrote something that caught my attention in the National Review. And I’ll put it up on the screen. He write this, “Unfortunately, no one can write a law against mothers’ owning guns that one day might be turned against them by deranged sons who then commit horrific acts of murder-suicide. Shooting rampages are very hard to prevent because they are so often committed by disturbed young men without criminal records who don’t care if they are caught and usually want to die. These are adult facts that don’t intrude on the childish world of White House policymaking. He notes Adam Lanza in Newtown, his own mother, of course, passed a background check.

SEN. CHUCK SCHUMER (D-NY/Chairman, Joint Congressional Committee on Inaugural Ceremonies/Finance Committee): Right. Here’s the bottom line. These laws are not perfect. And you’ll always find certain exceptions, but they make a huge difference. Every major person who has studied the Brady Law which is the most significant gun safety law we’ve passed since in the last 20 years has said it has reduced gun violence dramatically. Law enforcement is totally for the Brady Law. And the idea that felons or people who are mentally infirm or people who are spousal abusers should be allowed to buy guns, most everyone agrees on that, even when you believe…

GREGORY: But there’s no overwhelming evidence that the Assault Weapons Ban dramatically reduced this incident of violence, nor was there an uptick in this kind of violence once the Assault Weapons Ban lapsed.

SEN. SCHUMER: Well, the bottom line is that during the 10 years that the Assault Weapons Ban was in effect, the use of those weapons in crimes went down a significant percentage.

GREGORY: Senator, are there-- is there any gun regulation, any restriction of gun rights that you could accept that you could vote for?

SEN. TED CRUZ (R-TX): Well, sure. I-- I think the fact that we have background checks when-- when people buy firearms and we prevent felons and those with serious milt-- mental-- mental illnesses from acquiring them, I think those make perfect sense.

GREGORY: So, universal background check is something you could support?

SEN. CRUZ: Well, the current state of the law is those background checks are in place when a licensed firearm dealer sells firearms. And I think there’s a lot of room for improvement on the quality.

GREGORY: But 40 percent of the sales are-- are private citizen to private citizen. That’s the loophole we talk about.

SEN. CRUZ: Well, it-- that-- that statistic is actually pretty bogus. It-- it’s based on a study before the background checks were put into place and-- and so-- we’ve-- that-- that study is highly questionable, that 40 percent.

GREGORY: I don’t know, Wayne LaPierre never questioned that study when I brought up that point. He had a question about the feasibility and-- and correcting-- collecting records, but there’s still a loophole that a lot of people would like to correct.

SEN. CRUZ: You know, there actually isn’t the so-called gun show loophole. That doesn’t exist. Any licensed firearm dealer who sells at a gun show has to have a background check. It-- it’s a requirement that applies to every licensed firearm dealer. What it doesn’t apply to is personal sales one-on-one. And that’s true whether it’s at a gun show or not.

SEN. SCHUMER: I would say this is the sweet spot in terms of actually making us safer and having a good chance of passing. This is it. Right now, I-- I’m the author of a Universal Background Check Bill. I’m talking to pro-gun Democrats, excuse me, and Republicans. And I think you’re going to see very likelihood in the next week or two, a proposal that has broad support for universal background checks. And I would say this to my friend, Ted, if you are a-- someone who’s not a felon, you go into a gun store, a registered firearm dealer and buy 20 guns, which you can, they’ll do a background check on you, you can sell them to anyone you want, felon or anybody else. So there are huge holes in this law. And I would say this the last time we made progress on the pro gun safety side was tightening up this law for mentally ill people in 2007. I carried the law, and the NRA actually didn’t oppose it. So I think, we have-- this is the best chance of getting something done. And I think you’re going to find much broader support than we’ve ever imagined.

GREGORY: It’s interesting-- it’s interesting, Senator Cruz. The president said, look, to those Americans who live in states, like your own, where there are very strong gun rights representatives, you’re the ones who have to rise up and pressure those senators and congressmen to-- and demand an assault weapons ban, a ban on magazines. And I wonder if the National Rifle Association has helped his cause with an ad that was released this week that talked about armed security guards, the president is skeptical that those could work, did not rule it out. But talking about the president’s children and that issue of security, watch a portion of that ad.

(Videotape)

MAN: Are the president’s kids more important than yours? Then why is he skeptical about putting armed security in our schools when his kids are protected by armed guards at their school?

(End videotape)

GREGORY: Over the line?

SEN. CRUZ: Look, I’m going to let people to decide to run what ads they want. I do think there’s a fundamental point here, and that-- and there is a point of hypocrisy when it comes to gun control. That many of the proponents of gun control are very wealthy, live in communities where they can outsource police protection. But you have a lot of people that are worried about preserving the safety of their own home. If you’re talking to a single woman living in Anacostia, who-- who has the misfortune to-- to live next to a crack house, to hell her she doesn’t have a constitutional right to keep and-- and bear arms, I think is fundamentally wrong.

GREGORY: This is-- but Senator, this is a narrower point about armed guards in school. This has happened to be an ad is factually inaccurate. The president’s children are protected by the Secret Service, and that’s not their own choice. And yet you’re trying to make a broader point, which I understand. But you think this is a-- this is a constructive part of the debate in moving the public mood?

SEN. CRUZ: What I don’t think is constructive is what the president is doing right now, which is in-- within minutes of that horrible tragedy in Newtown, the president began trying to exploit that tragedy to push a gun control agenda that is designed to appeal to partisans, designed to appeal to his political partisans.

GREGORY: Mm-Hm.

SEN. CRUZ: Number one, it would have done zero to prevent the crime in Newtown. Number two, many of the provisions are contrary to the constitutional protection of the Second Amendment. But number three, they don’t work. You know, Chuck said a minute ago the Assault Weapons Ban was tremendously successful. The Assault Weapons Ban was one of the least successful bills that has ever been put in place. And in fact, when the ban expired, there were roughly 700 murders using all rifles. Today, there are roughly 300. There’s less than half. This is not designed to actually solve the problem of violent crime. This is designed to assuage liberal partisans who want to push their agenda forward.

GREGORY: And Senator Schumer, to challenge you, the president did not challenge any people in his liberal base. He talked about all these measures. He did not talk about video games. He didn’t talk about violence in Hollywood where he gets a great deal of his campaign funds. He didn’t do anything to make his own folks uncomfortable. He just said to Senator Cruz’s constituents, rise up and force him to go for gun control.

SEN. SCHUMER: David, I don’t think that’s fair. The president has talked about generally dealing with violence in our society. I agree with that. But to take guns off the table, you know, to not talk about guns when it comes to gun violence, is to not talk about smoking when it comes to lung cancer. It just doesn’t make any sense. It’s part of the problem. And we have to deal with it. Now I agree with Ted. There’s a right to bear arms. I want to see that lady if she wants to have a firearm in her house. Have it. And I think those of us in the pro gun safety movement should accept the Heller decision and say there’s a constitutional right to bear arms. And it’s no less important than the right to free speech, the right against search and seizure. But Heller also said that there should be reasonable limitations. They’re allowed reasonable limitations. I don’t think that lady needs an assault weapon. I don’t think she needs a 100-round clip. I don’t think, for instance, that those things would help her in any way. And so to say she has a right to bear arms, yes. To say just like on the First Amendment, we say you can’t scream fire in a crowded theater falsely. We have anti-pornography laws. We have anti-liable laws. There are reasonable limitations. And some in the pro gun movement and the NRA in many instances doesn’t believe in any limitation at all. That is not unconstitutional. That just is dumb.

GREGORY: Let me move on to the debt. This issue will continue so will the issue over the debt and Senator Cruz, House Republicans have taken a step back on this debt ceiling standoff. Should it be raised? This is how the New York Times described it over the weekend. I’ll put it up on the screen and have you react to it. Backing down from their hard line stance, House Republicans said Friday they would agree to lift the federal government’s statutory borrowing limit for three months, with a requirement that both chambers of Congress pass a budget in that time to clear the way for negotiations on long-term deficit reduction, to add muscle to their efforts to bring Senate Democrats to the table, House Republicans will include a provision in the debt ceiling legislation that says lawmakers will not be paid if they do not pass a budget blueprint. Was it the right thing to step back from challenging the president over raising the debt ceiling?

SEN. CRUZ: Well, I think the house proposal is a step in the right direction. There is no doubt the Senate hadn’t done its job. It’s been nearly four years since it’s passed a budget and-- and the Senate should pass a budget. But it doesn’t go nearly far enough. We have a crisis. I’ll tell you, I just got back last week from Afghanistan. And I had multiple servicemen and women clasp me on the arm and say, please do something about the debt and deficit. We’re bankrupting the country. That’s what the American people are looking for. And to date, politicians from both parties have been unwilling to take even a tiny step in the right direction. We’ve got to fix the problem.

GREGORY: The Senate has got to pass a budget. Do you believe that?

SEN. SCHUMER: Yes, I do. And let me just…

GREGORY: Why has it been four years since you’ve done that?

SEN. SCHUMER: First-- well, let me answer that.

GREGORY: Yeah.

SEN. SCHUMER: Let me first answer this. This was a major victory for the president. The Republicans now have now twice lost out on fiscal issues in the last month. First fiscal cliff and this. And I think they are losing ground on fiscal issues. On the debt ceiling, it made no sense to risk the full faith and credit of the United States for whatever agenda you have. The business community felt that. The public felt that. And so the fact that they have backed off both-- not only the idea that we should hold debt ceiling hostage, but second that it shouldn’t be one for one cuts, you know, Boehner used to say that, the House proposal doesn’t say that, dollar in cutting for every dollar in raising the debt ceiling.

GREGORY: But would you support a short-term measure that would force you to pass a budget?

SEN. SCHUMER: I think it should be longer because we don’t want to play fiscal cliff every three months. But it’s a positive step on-- on the budget.

GREGORY: There are always spending reform provisions. You never get a clean debt ceiling raise.

GREGORY: That’s not a question of whether you should. But historically it’s not been the case.

SEN. SCHUMER: Mitch McConnell proposed it two years ago and we passed it. So they should, but let me just say this on the budget. We Democrats have always intended to do a budget this year for two reasons. First, it is not true that we haven’t had budget control in effect over the last several. The Budget Control Act of 2011 put rigid spending cuts that are in effect-- that were in effect last year. We cut a trillion dollars. We didn’t like it. It was much more of a Republican type proposal than ours. In effect, it expires this year. So we need-- wait, we need a budget. But second, it’s going to be a great opportunity for us. Because in our budget that we will pass, we will lift tax reform, which many of my Republican colleagues liked, but it's going to include revenues. It’s a great opportunity to get us some more revenues to help in part deal with sequestration and deal with the debt issue, so…

GREGORY: But Senator Schumer-- and I want Senator Cruz’s response here too. The reality is the president is willing to throw the long ball on this big Sunday of football, when it comes to gun control. And yet because of his view of Republican recalcitrance, he doesn’t step up and show real leadership and be proactive on a big spending cut proposal and Medicare cut proposal because he doesn’t want to go there. Why throw the long ball when it comes to gun control, but not do it and take a leadership role when it comes to spending cuts?

SEN. SCHUMER: Well, he did in the negotiations up to the fiscal cliff. The president put things on the table, 400 billion dollars in Medicare cuts. He was talking about change CPI, which many Democrats did (cross talk)…

GREGORY: You’re talking about more revenue. That’s not big enough on Medicare cuts according to Simpson-Bowles and a lot of others who think if you're going to get the four trillion in cuts, you’ve got to do something bigger than that.

SEN. SCHUMER: We have already done 1.7 trillion dollars in cuts. We’ve done 600 billion dollars in revenues. You’re going to need more revenues as well as more cuts to get the deficit down. And I’ve talked to Leader Reid. I’ve talked to Budget Chair Murray. We’re going to do a budget this year and it’s going to have revenues in it and our Republican colleagues better get used to that fact.

GREGORY: Senator Cruz.

SEN. CRUZ: You know, David, I’ll mention that there was an area of substantial agreement with what Chuck just said. He said we should never ever, ever compromise the full faith and credit of the United States. I agree. And in fact, there is a bill that I am co-sponsoring, the Full Faith and Credit Act, which provides that, regardless of what happens to the debt ceiling, the United States will always, always, always meet its debt. We will never default on its debt. That was introduced in 2010. It didn’t pass because Harry Reid and President Obama didn’t want it to pass. They wanted to raise the specter of a default to use. So, Chuck, you know, you and I, we could make news right now on national television. Would you agree to support the Full Faith and Credit Act and take…

SEN. SCHUMER: The bottom line is…

SEN. CRUZ: …the possibility of a default off the table?

SEN. SCHUMER: Hey, I support the McConnell proposal. Let us raise the debt ceiling. No strings attached. And if Cong-- the president can raise it as he should be able to and if Congress wants to reject to two-thirds, the McConnell proposal is a good Republican proposal…

SEN. CRUZ: Hey, let me ask a very simple question. A bill that says regardless of what happens with the debt ceiling, the United States will never default on the debt, would you support that or not?

SEN. SCHUMER: I support the concept. I’d have to look at the bill. The best way to do that is the McConnell Amendment.

SEN. CRUZ: Well, we may have just made news.

GREGORY: Let me ask you two quick things. On this program last week, General Colin Powell was here. He talked about what he-- he worried about a dark vein of intolerance in the Republican Party in some quarters. You-- you are part of a-- a stream of new faces in the Republican Party, minority faces and voices in the party that seem to stand against that. How did you respond to it?

SEN. CRUZ: Well, I-- I saw that interview. I-- I respect General Powell a great deal. I-- I was disappointed with those comments. I-- I think he was buying into some of the partisan attacks. If you look at this last election, for example, I think the most racially divisive comment of the entire election was Joe Biden’s comment where he said if the Republicans win, they’re, quote, “Going to put you all back in chains.” That made my heart weep to see a sitting vice president playing to racial fears and playing on those issues. I think that’s unfortunate. I don’t think it has any place in politics.

GREGORY: Chuck Hagel, you were very tepid on MEET THE PRESS a couple of weeks ago.

SEN. SCHUMER: I was.

GREGORY: And now you’ve met with him, you’re more comfortable, you’ll support him.

SEN. SCHUMER: Here’s what changed. What I said on your show is I was going to sit down and talk to him because I had real concerns. I did. I spent 90 minute-- minutes with him. I-- I asked him very specific questions on the things that troubled me. His answers were forthright. And they were answers that allayed my concerns. Should we keep every option on the table to prevent a nuclear Iran? Yes. I went further. I said, do you-- do you think we can tolerate a nuclear Iran. He said, no. And I said to him, well, then, if we had to use military as the only choice, would you. He said, yes. Second, I asked him is Hezbollah and Hamas, should they be labeled terrorist groups. Yes. Should Israel be forced to negotiate with them if they don’t recognize Israel’s right to exist, if they don’t renounce violence. No, absolutely. Third, sanctions. Do you support increased sanctions? Would you support unilateral sanctions? Yes. I asked him. The difference-- there were differences between those statements then and now. He said they were five, six, seven years ago. The world has changed. Even George Bush didn’t have a regime against Iran at that point in time. I told him I was going to make these remarks public.

GREGORY: Hm-Mm.

SEN. SCHUMER: And he said, go right ahead because I’m going to say the same thing at the hearings. When he-- at those hearings, he’s going to allay the concerns of many people. It’s sort of interesting, David, one final point. Neither APAC nor Anti-Defamation League nor American Jewish Committee or any of the major groups has come out against Hagel, most of the opposition to him comes-- it’s seems politically from the hard right.

GREGORY: All right. We will leave it there. You spend your morning with Cruz, and then you get to hang out with Beyonce as chair of the Inaugural Committee so you…

SEN. SCHUMER: Oh, wow. And Kelly Clarkson. I love her.

GREGORY: …Kelly Clarkson.

SEN. CRUZ: And-- and David, let me point out, everyone of those issues that-- that Chuck just mentioned…

GREGORY: Yeah.

SEN. CRUZ: …for Hagel, he disagreed in his record with Chuck Schumer, on Israel, on Iran, on Hezbollah. Hagel’s record is directly contrary. And I’m always skeptical of confirmation day conversions. I understand it is difficult to oppose a president of your own party. Chuck Schumer has been a terrific defender of the U.S.-Israeli relationship. But I think this Hagel co-- nomination is-- is very concerning.

GREGORY: All right. I’m going to leave it there. This debate will continue. I’m out of time. Thank you both very much as these debates continue.

And coming up here, we’re going to break down President Obama’s leadership challenges over the next four years, both at home and abroad. Our political roundtable is here. Former Senior Adviser to President Obama, David Axelrod; host of MSNBC’s Morning Joe, Joe Scarborough; Presidential Historian Doris Kearns Goodwin; special correspondent for NBC Tom Brokaw; and our chief foreign correspondent Richard Engel. Plus, Chuck Todd is going to be along as well to take us inside the numbers as the president looks to begin his second term, all coming up after this short break.

GREGORY: For two-term presidents, their second inaugural address is often a chance to outline a new vision and emphasize the successes of their first term with an eye towards shaping their place in history. Throughout the past 223 years, only 16 presidents have delivered two inaugural addresses. We put the speeches of the last three two-term presidents through a word cloud to see what themes they chose to emphasize. By looking at the words they used the most, we can get a sense of the legacies they wanted to leave. President Reagan who at his first inaugural famously proclaimed that government wasn’t the solution but the problem aimed to underscore that principle using the word “government” 16 times.

(Videotape, January 21, 1985)

PRESIDENT RONALD REAGAN: That system has never failed us but for a time, we failed the system. We asked things of government that government was not equipped to give.

(End videotape)

GREGORY: President Clinton, aware that his second term would be the last of the 20th century, challenged Americans to embrace the future responsibly using the word “century” 21 times to emphasize the coming of a new era.

(Videotape, January 20, 1997)

PRESIDENT BILL CLINTON: At the dawn of the 21st century, a free people must now choose to shape the forces of the information age and the global society to unleash the limitless potential of all our people, and yes, to form a more perfect union.

(End videotape)

GREGORY: And President Bush, whose time in office became defined by 9/11 and the ensuing wars in Afghanistan and Iraq, laid out his vision for America’s role in the world, using the words “freedom” and “liberty” 42 times.

(Videotape, January 20, 2005)

PRESIDENT GEORGE W. BUSH: All who live in tyranny and hopelessness can know the United States will not ignore your oppression or excuse your oppressors. When you stand for your liberty, we will stand with you.

GREGORY: So the stage is set for President Obama’s address just a little over 24 hours from now. What words will dominate his word cloud? Tweet us @meetthepress, #MTPWordCloud. In the meantime, our roundtable is here with their own prediction of what he’ll say right after this break.

(Announcements)

GREGORY: We’re back. NBC News political director and our chief White House correspondent Chuck Todd is going to take us inside the numbers of our latest Wall Street Journal/NBC News poll as you tee up the second term, Chuck.

MR. CHUCK TODD: A little bit. You know, David, four years ago, enormous expectations for President Obama. There were a lot of people, hope and change was big. This time, call it pragmatic hope as far as the public is concerned. As you see here, just less than 30 percent believe they’re going to evaluate President Obama with a clean fresh slate; 64 percent will evaluate him based on past feelings. And here, a continuation of a trend we saw throughout his first term, right. Very much similar, frankly, to what Ronald Reagan dealt with during his eight years. Personally, public really likes President Obama, 74 percent. But his policies--again, more people disapprove of his policy, 49 percent, than approve of them there at 47 percent. So what about the next four years? Sort of a mixed optimism, if you, well, I go back to this idea of pragmatic hope, 43 percent optimistic, 35 percent pessimistic, 22 percent kind of mixed. And staying with our theme, David, of word clouds, we asked folks to send a message to President Obama. What would they like to say for his second term? And as you can see here, look at the most popular phrases. A lot of them have to do with the economy. Fix the economy. Create jobs. Then there’s stop spending. And then, of course, probably the most important that he will talk about tomorrow, compromise/work together.

GREGORY: All right. Chuck Todd, thank you very much.

Let me bring in the rest of our roundtable here. Joe Scarborough is here, of course, of MSNBC’s Morning Joe; Senior Adviser to Obama in 2012, the reelection campaign, David Axelrod; NBC News chief foreign correspondent Richard Engel is here, safe and sound in studio. Richard, it’s so great to see you…

MR. RICHARD ENGEL (Chief Foreign Correspondent, NBC News): Thank you.

GREGORY: …in person this morning. New York Times best-selling author of the Lincoln biography, Team of Rivals, presidential historian Doris Kearns Goodwin, in between awards shows has joined us; and NBC News special correspondent Tom Brokaw. Welcome to all of you. And-- and Tom, that’s where we tee it up. The president, as he begins a second term, very difficult climate in Washington and very real expectations.

MR. TOM BROKAW (NBC News): Yes. And I was looking at those top three priorities for the American people, and they all fit into his single most difficult task, it seems to me, both conceptually and specifically. In the next couple of years, and he only has a couple of years, these are second terms and not four-year terms. You-- you’re running right up to the mid-term election, frankly. I think that there’s a desperate need for the country going forward to do something about tax reforms and entitlements fitting under the umbrella of fixing the economy and creating more jobs and stop the spending. That’s going to be tough. We’ve been giving people things for a long time. Now they’re going to have to start reeling them in and fine tuning them, and that’s going to take an exceptional hand in the White House to pull that off. So that’s a daunting task. You know, this is like the Saturday before Super Bowl Sunday. Everybody’s talking about what’s going to happen. Then the kickoff comes, and unexpected events begin to roll out across the political landscape, and that’s what he has to adapt to David.

GREGORY: Joe Scarborough, here’s The Economist this week which really struck me in a couple of different places, and the-- the cover is, how-- how will history see me with that image. And they write this: “An America that cannot deal with its financial problems other than through repeated crises followed by shabby postponements will eventually go broke. And its capacity to offer leadership to the world is gravely diminished.” This is a national security issue, and this is the Washington that this president presides over.

MR. JOE SCARBOROUGH (Host, MSNBC’S “Morning Joe”): The president has been given, though I think a great second chance. He really has. You look at-- you look at his first four years. He got absolutely trounced in the mid terms. Republicans made historic gains. He really came to Washington ill prepared to be president of the United States. He didn’t know how to deal with Congress. And he really didn’t figure it out for three, four years. But I really think if you look at these numbers, over 70 percent of Americans like him. He’s got a 52 percent approval rating. John Boehner has an 18 percent approval rating. Those are pretty good numbers. And I think also there’re glimmers of hope for those of us who believe the president has stayed on his side of Pennsylvania Avenue too much. He said over the past week or two that his daughters were getting older. They don’t like hanging around dad as much anymore.

MR. SCARBOROUGH: He’s lonely. You know, the president used to tell anybody that would listen, I work and then I go upstairs and I’m with my family. You can’t trivialize the fact that-- the fact that he’s talking about reaching out more, not just to Republicans, we all hear the same complaints from Democratic senators as well. It’s really good sign and let’s hope some things get-- get done. We have got to make this city work again.

GREGORY: To David Axelrod, Tom’s point, the perils of a second term, you all have certainly thought about this and talked to the president about it. How does he map out these next four years?

MR. DAVID AXELROD (Senior Adviser, Obama 2012 Re-Election Campaign): Well, first of all, I want to say I-- I-- I appreciate the priorities that Tom laid out. But there’s a larger priority of which this is part, which is how do you create an economy, rebuild an economy, in which the American dream, the American compact, is fresh, where people who work hard feel like they can get ahead and that’s not just about dealing with the fiscal crisis. It’s about education. It’s about research and development. It’s about controlling our energy future. All of these are part of the equation. And we can’t just do one piece of it, and we can’t let that piece prevent us or become a smoke screen for not acting on the others. So that is the challenge. How do you put that puzzle together, move forward in a balanced way, so we’re funding those kinds of priorities that we need to grow?

GREGORY: It’s interesting, though, Doris, as you look at the historical sweep as well. I mean, here’s a very toxic atmosphere in Washington. A carryover of, you know, difficult debates. And the president who’s popular, who’s got a unified party, but also seems reluctant to go out on a limb on some big areas where he thinks he’s not going to get much cooperation from Republicans.

MS. DORIS KEARNS GOODWIN (Presidential Historian/Author, Team of Rivals): I’m not sure that’s true. I mean, I think gun control. He came out with sweeping proposals. I mean, that’s certainly out on a limb. You’re not going to get a lot of support, perhaps, from Republicans. But his idea, I think, is that if you educate the country-- you know, when he talked to you, he mentioned Lincoln’s quote. There’s a second sentence to Lincoln’s quote. Lincoln’s first quote was, “Without public opinion, nothing can happen, with it, everything.” But then he said, “He who molds sentiment goes deeper even then he who makes laws or makes decisions.” So, I think the second term what he’s understood from the first term is that he was inside Washington too much, that you have to use the bully pulpit. You’ve got to get out among the people. You have to mobilize. He has got that base out there. He has a coalition that voted for him, pretty actively came to the polls. And the best presidents have been able to mobilize pressure from the outside in. And what four years has told him, maybe he’s tried to get Republicans over. Some of them don’t come. He should keep trying. And he has to really keep trying with the Democrats. I agree. Those are the ones he should schmooze or whatever that word is. Schmooze. I didn’t say right.

GREGORY: Well, we’ll talk more about that in few minutes in terms of U.S. and the world, but just as somebody who lives abroad, and I talk about, you know, as-- as The Economist did, America’s ability to have influence in the rest of the world, how-- how do you see the challenges he faces?

MR. ENGEL: Well, it’s greatly diminished. I think the Chinese model is one that appeals more and more in the developing world. People see that an authoritarian state can hold onto power, can hold on to stability and can drive the economy forward. When you look at-- when you talk to people in-- in-- in Africa and across the Middle East, they’re not satisfied with the way things are going. Sure this idea of democracy was injected into the region, but it has brought mostly chaos. So, I think the U.S. role, the U.S. example, is not the one that is on the-- on the mind of the youth internationally. People are looking more to-- to different kinds of models.

MR. SCARBOROUGH: Well, the Soviet model seemed pretty attractive-- to some of the same regions in the 1950s. So I-- I-- I would be skeptical that an authoritarian model is going to….

(Cross talk)

GREGORY: And the Chinese model has its issues.

MR. ENGEL: Certainly has its issues.

MR. SCARBOROUGH: And it's slowing down.

MR. ENGEL: But you don’t hear people talk about the United States the way they used to. You don’t hear them talk about the U.S. in this idea that, sure, people would like to come here and set up their-- you know, get-- you know, get visas and green cards. But the U.S. just doesn’t seem to have that kind of clout.

MS. GOODWIN: We still have the most successful economy in the whole world, though, right?

GREGORY: Well, let-- let me inject with this, Tom. One of the-- one of the issues…

MR. ENGEL: People aren’t that depressed anymore.

GREGORY: ...the president-- the president’s opposition. How do Republicans use this moment, the president has just been re-elected, but so has Congress and the House held onto Republican rule. How-- how do they use this moment?

MR. BROKAW: Well, it’s much different to the what-- what happened in the House or what happened to the president. The president gets up with a robust electoral victory, a robust popular vote victory and starts his day with a nutritious breakfast. I mean, this is really going well for him at the dawn of the second term. You know, the debate within the Republican Party, which is underway right now, we just saw that over the weekend, in which they pulled back on what they’re going to do about the debt ceiling. They’re going to use the phrase kick the can down the road, as beginning to sound more and more like kicking the latrine down the road, by the way, when they use the reference to the can. But they-- they stepped back from their hard line position. And I think what they have to do--Joe knows a lot more about this than I do--they have to reform from within and not seem like a party that is getting smaller and narrower and-- and the opening to that party is getting much, much narrower. They have to open it up to a lot more people.

GREGORY: And Joe, they obviously saw the polling on the debt-- just taking on the debt ceiling. But nevertheless, I’m sure you would challenge David and President Obama with what will force his hand to cut spending beyond what he’s done, which you saw in our polling. Americans do want, as much as they want compromise.

MR. SCARBOROUGH: They do. I mean, they do want that to happen. I-- I do want to follow up, though, on something David said earlier, what Americans want more. And actually Rames-- Ramesh Ponnuru with the National Review would agree. And that is that vision.

MR. AXELROD: I still hold that view.

MR. SCARBOROUGH: The-- the vision that-- that Republicans have to speak to the middle class concerns. And it’s not just about the debt, even though that’s the issue that personally matters the most to me. This party has been getting smaller and smaller and smaller. William F. Buckley in the 1960s at some point had to start defining the boundaries of conservatism. And so what he did he do? He went after the John Birch Society. He went after Ayn Rand. He went after George Wallace. That has to happen again with this party because it’s getting smaller and smaller. In this debate, we actually have conservative thinkers, talking about Ronald Reagan being a RINO, a Republican in Name Only, because he supported an assault weapons ban. It-- they-- they-- they keep pushing themselves closer and closer to the cliff.

GREGORY: So…

MR. SCARBOROUGH: …and-- and-- and well, I just got to say one other really important point because I’ve made a mistake over the past month talking about how Republicans have also won a majority in the House. As this article-- I was-- I was referencing mentioned, we actually got a minority of votes nationwide in House races. It was just gerrymandering from 2010…

MR. AXELROD: Well, it was interesting to me the Congressional Republicans went on a three-day retreat and what they concluded is that retreat is a good strategy. And that’s what they’ve done because they’re looking at your poll and other polls that have Republicans at historic lows…

MR. SCARBOROUGH: Right.

MR. AXELROD: …in terms of their popularity, Congress at historic lows and that’s because of this unyielding, uncompromising point of view. In that NBC poll, a-- a full third of people volunteered that the thing they wanted Congressional Republicans to do was compromise. It was the highest item on the Obama list was I think was 11 percent. Thirty-four percent said we want Congressional Republican to compromise.

MR. SCARBOROUGH: No, I-- I actually agree with what the Republicans decided to do. You can call it kicking the can down the road for three more months. But I think it’s great that they are actually challenging the Democrats to do something they haven’t done in 1,362 days, well, pass-- pass a budget. You know, the president has sent budgets to the United States Senate that the Democrats have controlled. And he’s got zero votes every year.

GREGORY: I want to ask you about this story.

MR. SCARBOROUGH: What’s their vision?

GREGORY: To the extent that the president is saying on gun control, we talked about this a minute ago, look, challenge Republicans. Let’s change views about-- about gun laws in this country. He’s not challenging Democrats. He’s not saving Democrats from themselves when it comes to Medicare and saying, look, I know this is a very tough vote, but we’ve got to do something here, if I’m going to play this leadership role to really put the budget on a different heading.

MS. GOODWIN: Well, I think there’s no question he will have to do that. The question is, he’s doing it in stages. And I think that’s going to be one of his great leadership challenges is to make sure that Democrats are willing--those who don’t want to do anything about entitlement reforms, others that do want to do something. He’s got that split within his own party, which is not as divisive as what we’re talking about with the Republicans, but if he’s going to bring people along on debt concerns-- and we have to invest in the future. I mean that’s the problem with that poll, people say we don’t want any more public spending, but we want jobs, we want the economy. If you want the economy to work, you need to invest in education, you need to invest in infrastructure, you going to need to spend money. So you’re going to figure out where do we not need to spend money and he’s got to bring his Democrats along.

MR. BROKAW: Well, I just want to respond to what David earlier was saying about and what Doris was saying just now about what we have to do for the future. I wasn’t separating out the specifics about entitlement reform and tax reform from the larger issue about how we bring the middle class back, because they are all tied together, David.

MR. AXELROD: I understand, but the-- the Republican thinking in Congress has been that the cuts are enough and that is not the answer.

MR. BROKAW: No, no, I-- I couldn’t agree more. If you take just education and job creation, for example, there is going to be a sea change in American education, which is already underway. Go long on community colleges.

MR. AXELROD: Yes.

MR. BROKAW: Developing a skill set.

MR. AXELROD: Yes. We need to support that. But can I just say one thing…

(Cross talk)

MR. SCARBOROUGH: You get to-- you get to put something in perspective…

MR. AXELROD: I have to challenge-- I have to challenge…

(Cross talk)

MR. AXELROD: …just feel like it's Morning Joe.

MR. SCARBOROUGH: …Medicare and Medicaid together. Medicare and Medicaid together within 10 years devours every cent.

MR. AXELROD: There’s a progressive argument for dealing with that issue.

MR. SCARBOROUGH: Which is what? When are we going to hear it?

MR. AXELROD: Well, I want to challenge you and you as well, David, on this point. The president…

MR. SCARBOROUGH: You don’t want to challenge them.

MR. AXELROD: No-- no…

MR. SCARBOROUGH: You should challenge them as well.

MR. AXELROD: No, I want to challenge you and you. The-- the premise that the president has not been venturesome in this area, has not been willing to come be-- be forward leaning, is not true. The president talked about changes in social securities. He’s talked about changes-- he’s committed himself to cuts in Medicare, what he hasn’t done is-- is talked about turning it into a voucher program because that’s not shifting the cost onto the backs of seniors and that ways…

MR. ENGEL: When-- when we talk about leadership, it seems like that’s where we were focusing on as seen from the outside-- now if you’re going to look at the United States from the outside, it seems like a lot of this administration is focused on very trivial issues. I watch your show. I watch a lot of television. And it seems like 90 percent of the debate is on things that are totally disconnected from the rest of the world. The Middle East is in collapse, al Qaeda branches are still out there. The last two wars that we have been involved in have been total catastrophes by almost any standard. And these problems aren’t going away.

GREGORY: Let me get in here because I got to take a break. But I’ll tease up where I want to go next, which is the U.S. in the-- in the world in the next four years. And we’ll start that with you, Richard, when we come with our roundtable right after this.

(Announcements)

GREGORY: More of our special discussion on this inauguration weekend coming up, including the U.S. role in the world. The challenges for President Obama in his next four years overseas when we come back on MEET THE PRESS.

GREGORY: We’re back with our roundtable. Richard Engel, our chief foreign correspondent, as we look at the U.S. and the world, again I go back to The Economist magazine which had an observation about how to sum up the president’s first four years as sort of four years of almost a coming home rather than active engagement in-- in the rest of the world. The tone of cool detachment has been his foreign policy hallmark Economist writes. From being the “indispensable nation”, Mister Obama’s America seeks to be an indispensable catalyst: present, but not deeply involved. Just to start you out on the huge threat of an Iranian nuclear weapon, how does that factor into the second term?

MR. ENGEL: Well, I think it’s possible that this year there may be an action by Israel against Iran. It looked likely last year. I thought it was going to happen and then it looked less likely. And people I’m speaking to think it is once again a possibility. That changes the entire dynamic and-- and this administration talks about wanting to shift to Asia. Sure, that sounds great. But I think it will be very difficult to do especially if that happens. If the Israelis decide after their elections that they’re moving a little bit more to the right, if the Iranian elections coming up bring that country even further to the right, it seems like some sort of clash is-- is coming. That’s just on the Israel-Iran. If you look-- broaden out a little bit, then you have Syria, which is in state collapse and is probably going to be in some sort of state of anarchy over the next few months. That will likely spread to conflict in neighboring Lebanon, also spread to conflict in Iraq. We could have a potential band of conflict from Lebanon, through Syria, into Iraq. This is not a time where you’re-- it is going to be easy to shift to Asia, even that’s where-- even though that’s where all the new billionaires are going to be.

GREGORY: There’s the added element of-- go ahead Doris.

MS. GOODWIN: I was just going to say what that shows is when you think about LBJ’s inaugural in 1965 hardly mentioning Vietnam, you think about FDR’s second inaugural in ’37 all on domestic politics, World War II breaks out. That’s the most important thing that happens to FDR, Vietnam is the most important thing that happens to LBJ so this…

(Cross talk)

MR. ENGEL: …we better watch for a Danzig moment. They’re-- they’re very concerned about the general state of play and that the United States is not engaged.

MR. SCARBOROUGH: And, by the way, more recently, look at George W. Bush. Remember in 2000…

MS. GOODWIN: Right.

MR. SCARBOROUGH: …he said he was to going to have a restrained, humble foreign policy. Then 9/11 hit. And now we’ve been dealing with wars for over a decade. We’ve already made reference to it while the Chinese have been investing in Africa. We’ve been dropping bombs in Iraq. We are now in Afghanistan, twelve years in, two billion dollars a week. Our defense budget keeps exploding. So an Iranian crisis comes at the absolute worst time for this country…

MR. ENGEL: If we want to talk about all this, things could change dramatically this year.

MR. BROKAW: And the other part of it and Richard and I have been talking about this a lot is that in search of a metaphor, I’ve been thinking about the Islamic role in Africa and in the Middle East is think of it as a large, very dry forest after years of drought. And a lightning strike anywhere, which is unanticipated, starts a brush fire. And then it goes across. We just saw what happened in Algeria, what’s going on in Syria at the moment. And we’re not dealing state-to-state. There’s an entirely new set of rules for dealing with that critical part of the world, to say nothing of the 300 million people who live there, the oil, the energy that we’ve got invested. And as Richard and I’ve been talking, what happens to the kingdoms, Saudi Arabia next door with an aging leadership. And they are in the bunker at the moment and then all of the Gulf States as well. Jordan, which is our best friend. So there’s a lot in play. And it cannot be just described…

GREGORY: All right.

MR. BROKAW: …as eat your spinach.

GREGORY: Let-- let me-- let get another break in here. We’ll be back with more of this in just a moment.

(Announcements)

GREGORY: We’re back and we’re talking about America in the world and the president’s next four years. David Axelrod, to the extent that the first term was defined by ending war in Iraq, ultimately ending war in Afghanistan, even though it meant surging up troops, what does American engagement in-- in the world, as you hear such a difficult scenario that Richard talks about, how does that change the president’s posture in the next four years on foreign policy?

MR. AXELROD: Well, look, let’s just review where we were four years ago. We were involved in two wars as Richard pointed out that were mismanaged and-- and we were, you know, deeply invested in those with lives and-- and dollars. Al Qaeda was central al Qaeda in Pakistan. Afghanistan was still operating, largely with im-- impunity. And our alliances in the world were shredded. There was tremendous antipathy toward the administration, toward the country. That has all changed. Now, I will-- I think every-- everyone at this table would agree the world is a very complicated place, it’s a complicated and dangerous place because of a lot of different forces. A guy sets him-- himself on fire in Tunisia, a whole region goes up, and, you know, because of-- of social media. So we are living in a different world and what we need to do is to be-- be smart about how we engage, where we engage, because one thing we can’t do is project force everywhere in the world. We-- we don’t have the resources and it’s not a smart way to proceed…

MR. ENGEL: This-- the drone policy has spread all over the world. And that is sort of what we’re known-- known by best. And to the Arab Spring, the United States was not a passive observer in this. Yes, a fruit vendor in Tunisia set himself on fire. Yes, there was social media that helped spread this-- this enthusiasm for change. But the United States did turn its back on Mubarak in Egypt. And I think we’re going to look back and see that as one of the most important decisions that President Obama ever made.

MR. AXELROD: And-- and, you know…

MR. ENGEL: And we’re not sure if it was the right one or not.

MR. AXELROD: I-- I am deeply respectful of you and your experience and like everyone happy to see you sitting at this table. But do you believe that we could hold back the tide of history that if the United States had made a different decision that ultimately…

MR. ENGEL: Yes.

MR. AXELROD: …those forces wouldn’t…

MR. ENGEL: I think it-- it wouldn’t have happened. Syria wouldn’t have happened. The revolution in Libya would have started, and the rebels would have lost. Things would have been very different had that decision not been taken. Was it the right decision, was it the wrong decision, I don’t think we know yet. But it was a very pivotal decision.

GREGORY: It raises a question…

MR. ENGEL: I don’t think things would have gone on as they continued…

MR. AXELROD: No, it’s a-- this is a--

GREGORY: But Joe-- Joe Scarborough, for instance, did you take the issue of Syria. How does the United States, a second Obama term, try to affect the end game if there’s a post-Assad Syria, which as Richard has laid out could be so dangerous?

MR. SCARBOROUGH: Well, we have to understand there are limits to American power. We can’t go into Syria and-- and affect that outcome dramatically. We did make a choice in Egypt. And there were a lot of diplomats from the Middle East that were calling me ahead of time that I’m friends with saying it was a terrible mistake, and we’d rue the day that we made that decision, we abandoned a friend of thirty years. That’s something that historians are going to have to make-- make up their minds on. But when it comes to foreign policy, and I want to push back a little bit on Richard as well. And Richard, I’m glad you’re back too, but, don’t you like how Axelrod says, he’s glad you’re back. Glad you weren’t killed. But…

MR. SCARBOROUGH: But-- but-- listen, you know, the-- the-- the thing is, though, so much of-- of the United States’ power now is not going to be-- we’re-- we’re not going to project power by dropping drones in country after country after country where we haven’t even declared war. There is going to be a terrible backlash to that. But I hate to keep going back to it, but how we handle our debt, Medicare, Medicaid, the long-term debt. I mean, because we’re-- we’re going-- we’re…

(Cross talk)

GREGORY: You want to turn this discussion to your issues, he wants to turn the…

(Cross talk)

MR. SCARBOROUGH: No, no, no, no. Hold on for a second, though. Listen. We’re going to own the 21st century based on soft power, not based on missiles that we’re dropping. We can’t occupy every country that’s dysfunctional.

GREGORY: This is an appropriate final area, Doris, because this is ultimately about how you craft legacy, which is what second terms are about.

MS. GOODWIN: And despite our concern about second term curses, you know, Nixon resigning, Bush overreaching, and-- and Clinton impeached, it is a great opportunity for president-- hardly any president has been historic without a second term.

GREGORY: Mm-Hm.

MS. GOODWIN: But I think to go to Joe’s point, one of the legacy questions will be to-- to Richard and us combined: Eleanor Roosevelt said during World War II, you can’t fight for democracy abroad without strengthening it at home. And I still think that strengthening Democracy at home, getting our middle class rising again, figuring out inequality of income, dealing with entitlement, dealing with our fiscal problems, that has to be a priority even as we step abroad. That’s the first Economist quote. They say we’ve screwed up home and so then-- then-- then they argue that we’re not engaged enough abroad. You have to do both. And the question is management of time. I think the most important thing hopefully the president learns in the first term after four years, how did I spend my time? Did I spend enough time with Congress or too much time? Enough time with the press or too much time? Enough time with the people? Enough time on foreign? Enough time on domestic? He’s got a limited number of hours in the day. And that’s the best thing you can learn. You become a better president after those four years, hopefully.

MR. BROKAW: President famously said to Medvedev of Russia, tell President Putin, I’ll be more flexible in my second term.

MR. AXELROD: No, I don’t know that he said flexible, but…

GREGORY: I’ll have more flexibility.

MR. AXELROD: Right.

MR. BROKAW: Yeah, I’ll have more flexibility in my second term. What did he mean by that?

MR. AXELROD: I don’t know. I never asked him about that, Tom. But I-- but let me slide over and evade your question and-- and-- and…

(Cross talk)

MR. AXELROD: No, no, no. Look, I think that it’s clear that when you’re in the middle of an election campaign, whoever you are, you have less flexibility. So I mean, I-- I-- I don’t-- I think more was made-- more-- more…

(Cross talk)

MR. BROKAW: …different-- different kind of relationship with Russia, which is after all a behemoth out there that we’re not talking about very much and it’s got big stakes in Iran and Syria…

MR. AXELROD: I think we have to-- we-- I think we have to deal with Russia. They are a player on a number of-- of issues that are important to us. And we have to feel out the relationship now with Putin who is being very aggressive. But I just want to make one-- I-- what?

GREGORY: We’re almost out of time.

MR. AXELROD: Okay.

GREGORY: We’ve got about five seconds here.

MR. AXELROD: I don’t think that the United States of America can be effective if we stand with the forces of, uh, uh-- of autocracy against the yearning for freedom.

GREGORY: I got to-- I got to make that…

MR. AXELROD: I mean I think that’s just fundamental.

GREGORY: I apologize I got to make that the final word. Thanks to all of you here. Before we go, a quick programming note. Stay with NBC News for a special coverage of President Obama’s inauguration starting tomorrow on TODAY. I’ll join Brian Williams for all of our coverage. That’s all for today. If it’s Sunday, it’s MEET THE PRESS.